Breached of Contract: Diamond Bank Slammed With $45m Suit

An indigenous aviation Firm, Topbrass Aviation Limited has slammed $45 million USD breach of Contract Suit on Diamond Bank Plc before a Federal High Court in Lagos, south west Nigeria.

The aviation Firm in the Suit marked FHC/L/CS/1488/2017, is seeking an order of the court for special damages of the sum of $19, 250 million USD,against the bank and being the revenue or income it lost from December 2014 to the date of filling the Suit, cause by Diamond Bank’s unethical practices.

The Aviation Company is also seeking an order of the court to compelling Diamond Bank Plc to pay it the sum of $25 million USD and $875 000 USD, as special and exemplary damages respectively, for several outrageous and reprehensible breach of its banker’s duties to it, and for loss of income which would have accrued to it from the commercial use of its aircraft.

Narrating what brought about the current legal action, the aviation firm in an amended statement of claim filed before the court by its lawyer,Barrister Fidelis Albert, stated that it has a banker/customer relationship with Diamond Bank and such relationship is still subsisting made it to open and maintain bank accounts with the bank in the course of banking business,the company maintains 3 Dollars and 2 Naira denominated accounts with the bank.

Sometimes in 2010, the Aviation company bided for and was awarded a multi-million dollar contract by Chevron Nigeria Limited (CNL), to provide aircraft charter and auxiliary aviation support services for Chevron, and that by the terms of the contract, it had the obligation to deploy two Bombardier Dash-8Q300 aircraft for the exclusive use and Service of Chevron Nigeria Limited on an initial two-year charter.

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The purchase price for the aircraft was $9.5 million USD, However, the cost of undertaking a comprehensive back-to-service maintenance on the aircraft before it could introduce the aircraft to its fleet for routine flights, was over $1 million USD, and on account of prohibitive cost, it was constrained to approach Diamond Bank, as its banker’s, for a loan to finance the purchase, maintanance and importation of the Aircraft.

The aviation firm stated further that in obtaining the credit facility, it entered into series of negotiations with Diamond Bank, and after its proposal including the risk, cash flow projections, income stream on existing contract, potential incomes and commercial viability has been fastidiously assesed by the bank, and upon the conclusion of the negotiations, it was granted credit facility of $10.5 milliom USD.

The plaintiff also stated that by the term of the offer letter of the facility, it was require to make and indeed made, an equity contribution to the loan portfolio to the tune of 10 percent of the value of the credit facility, which amounted to the sum of $1.050 million USD.

The plaintiff further stated that sometimes in 2010, it entered into an Aircraft Maintanance abd Service Provider Agreement (AMSP Agreement) with an aircraft maintenance facility in South Africa known as Execujet Maintenance (Pty) Limited.

Pursuant to the AMSP Agreement, it began servicing and/or maintaining it’s aircraft fleets with Execujet. The first aircraft, similarly a Bombardier DHC-8-Q315 marked 5N-TBC and MSN 614, was delivered to Execujet for ‘C’ check sometimes in March 2013, for which Execujet completed the scheduled maintenance within a ten-week period at a total cost of about $650, 000 million USD.

The plaintiff, averred further that quite unknown to it, and while it was labouring to resolve payment issue with Execujet, Diamond Bank had sometimes in January 2015, surreptitiously circumvent it, and commence clandestine discussion with the Execujet with a view to retaining the services of Execujet as its agent for sale of the aircraft. With this, the plaintiff said Diamond Bank and Execujet concluded an agreement dated May 14, 2015, the agreement it termed intended to overreach and extinguish its proprietary and ownership right of its aircraft.

The plaintiff alleged further that Diamond Bank interference with its contract with Execujet, through deceit, fraudulent misrepresentation and breaches of banker’s fiduciary duties to it, gave Execujet the impetus to boldly defraud it and foster the chains of fraud and breach of contract.

The company further alleged in its particulars of damage, that Diamond Bank breached its banker’s duties of confidentiality, care, good faith and honoring mandate to it,without cause, by:
Divulging its credit standing and private financial information to Execujet in a false, misleading and inaccurate manner; Maliciously misrepresenting its credit standing to Execujet without authority, refusing to honor its payment mandate to vendors in respect of the Aircraft thereby injuring it’s credit and reputation.

It also stated that Diamond Bank unilateraly accessing and making payments without and against the mandate of the company. And that the bank covertly and maliciously interfering with or circumventing it’s contractual relationship with Execujet,or unjustly inducing Execujet to breach its Aircraft Maintenance Agreement with the company, including countermanding the company’s instructions and directives to Execujet in respect of maintenance of the Aircraft and incidental matters.

The plaintiff averred that Execujet concluded maintenance of the Aircraft in October 25, 2016, however following the action of Diamond bank, Execujet was in dilemma of who to hand over the aircraft to, in view of competing claims of the company and Diamond Bank, adding that with the steps taken by the Diamond Bank, consequently Execujet continues to unlawfully retain the possession of the Aircraft in South Africa at Diamond bank’s behest and pleasure, while the actions taken so far has put Topbrass Aviation company in a state of perpetual indebtedness to the bank.

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